Acquisitions & Take-Over

Why should firm take over

Tata motors overview

Jaguar overview

Land Rover overview

Ford motor Company overview

Why acquire Jaguar

Why did ford sell jaguar

Deal Process

Financing Strategy

Conclusions

•When one company takes over another and

clearly establishes itself as the new owner,

the purchase is called an acquisition.

•Acquisition is generally considered negative

in nature

A takeover attempt that is

strongly resisted by the

target firm

Target company's

management and board of

directors agree to a merger or

acquisition by another

company.

• To gain opportunities of market growth more quickly.

• To seek to gain a more dominant position in a national or

global market

• To acquire the skills or strengths of another firm.

• To acquire a speedy access to revenue

• To diversify its product or service range to protect itself

against downturns in its core markets

.

USD 12.1 billion

Tata Steel buys Corus Plc

USD 6 billion

Hindalco acquired Novelis Inc.

USD 1.6 billion

Suzlon Energy Ltd. acquires REpower

USD 1.58 billion Essar Steel acquired Algoma Steel

USD 2.3 billion Tata buys Jaguar-Land Rover

JLR was a part of Ford's Premier Automotive Group (PAG) and were

considered to be British icons.

Jaguar was involved in the manufacture of high-end luxury cars

Jaguar Cars Ltd. ( better known simply as Jaguar) is an automaker

from England, United Kingdom that manufactures luxury and

executive motor car.

• Sir William Lyons founded Jaguar as the Swallow Sidecar Company in

1922, originally making motorcycle sidecars before switching to

passenger cars.

• The name was changed to Jaguar after the second world war due to the

unfavorable connotations of the SS initials.

• British car manufacturer founded in 1948 as a marquee of the

Rover Company.

• Known for superior off-road and road performance

• 1976 – 1 million cars running on the road

• In 1994 Rover Group was taken over by BMW

• Sold to FORD MOTORS for $ 2.75 b in 2000.

• Used by military for projects and expeditions, Safe but less

reliable, Makeover in recent times

• Land Rover manufactured high-end SUVs.

•Location: Dearborn, Michigan

•Founded: 1903 by Henry Ford

•Competitors: General Motors, Toyota

•Brand names: Lincoln, Mercury, Volvo, Mazda, Jaguar and Land Rover

•CEO: Alan Mulally Henry Ford and his Model T

• 1922 - Founded in Blackpool as Swallow Sidecar

company

• 1960 - Jaguar name first appeared in 1935

• 1975 - Nationalized in due to financial difficulties

• 1984 - Floated off as a separate co in the stock market

• 1990 - Taken over by Ford

• A statement of ultra luxury

• Holds Royal warrants

• Rarely advertised

• Ford’s formula one entry since 1990s

• July 2007- Announcement from Ford that

it plans to sell Land Rover and Jaguar.

• August 2007 - Major bidders are

identified

Likely buyers

• Tata Motors

• M&M

• Ceribrus capital Management

• TPG Capital

• Apollo Management

NEED FOR GROWTH

In $ million

Particulars TAMO JLR Consolidated

Net tangible assets 2510 2246 4756

Net intangible assets 111 2010 2121

Vehicles financing receivables 2935 - 2935

Net current assets -57 -107 536

Cash 638 - 638

Trade investments 233 - 233

Pension assets - 696 696

Other assets 3 297 300

Total assets 6373 5142 12215

Warranty liability and other provisions 489 2667 3156

Pension liability - 19 19

Deferred tax liability 238 - 238

Shareholders equity 2314 2456 2314

Capital assets - - 156

Minority interest 30 - 30

Debt 3302 - 6302

Total liability 6373 5142 12215

Balance sheet

TAMO JLR SPV Cons..

sales 10210 14214 - 24424

Cost synergies - - - -

EBITDA 1196 935 - 2131

EBITDA margin 11.70% 6.60% - 8.70%

Depreciation 218 699 - 917

Interest 140 42 - 182

Other income 105 - - 105

PBT 944 194 - 1138

Interest cost of acquisition - 225 225

Proforma PBT 944 194 -225 913

Impact on PBT -3% - - -

In $ millionP&L A/c

Opportunities:

• Support from Ford in terms of Technology, Engine, IT, Accounting

• Adding up of luxury brands in the product line

• Access to European Market

• Market is volatile and driven by new products

• Strong presence of competitors like Mercedes, BMW, Lexus and Infinity

Threats

Weaknesses:• Jaguar’s declining sales record

• Inexperience of handling such

luxury brands

Strengths:• Tata’s strong

management capability

• Strong monetary base

to investTata’s Jaguar Land Rover Acquisition

o Voluntary retirement to 600 employees.

o Agency staff reduced by 800.

o Offered leaves to 300 workers of Bromwhich and solihull

plant.

o Additional 450 job cuts including 300 managers.

JLR had many new models lined up for next 3 years, so no much work just profits

Strong R & D culture and facilities

Component sourcing, engineering and design benefits